New Internationalist

Don’t believe the hypermarket

Issue 395

With supermarkets proudly trumpeting their eco-credentials, Sarah Irving of Ethical Consumer magazine investigates whether the monster megastores really mean it.

If you believe the hype, supermarkets the world over are going all green and cuddly. The British giant Tesco has announced that it is bolting renewable electricity generation on to its stores and rewarding customers for re-using plastic bags. French supermarket transnational Carrefour is advertising its reduction of toxic chemicals in cleaning products. The Real Canadian Superstore chain is giving a high profile to its range of ‘environmentally friendly’ household goods. Most dramatically of all, Lee Scott, CEO of the much-criticized Wal-Mart, has announced a whole raft of environmental initiatives, including selling certified ‘sustainable’ seafood and a massive commitment to organic food and clothing. What’s more, he has pledged that such products will only cost 10 per cent more than their less sustainable alternatives.

‘It is clearly good for our business,’ says Scott. ‘We are taking costs out and finding we are doing things we just do not need to do, whether it be in packaging, or energy usage… there are a number of decisions we can make that are great for sustainability and great for bottom-line profit.’1

But is the ‘pile ’em high, sell ’em cheap’ business model really compatible with sustainable development? Or are supermarkets projecting friendly images to divert attention from accusations that they are causing great harm to our society, health and environment?

A small number of supermarkets control what much of the world eats. In Australia two companies, Woolworths and Coles, sell a third of all food consumed. In Britain the ‘big four’2 sell 75 per cent of the country’s groceries, with Tesco alone controlling 30 per cent of the market. In the US Wal-Mart, the largest retailer in the world, controls 20 per cent of a $450 billion market.

These trends are rapidly embedding themselves in Majority World countries too, with a third of Mexico’s food expenditure going to Wal-Mart alone, and Brazil’s domination by supermarkets going from 30 per cent to 75 per cent in just 10 years. This power means that supermarkets are effectively deciding what we eat and how much suppliers will get paid for it.

And they’re not planning to stop there. The ultimate dream is to dominate all so-called ‘non-food’ sectors as well: clothes, insurance, pharmaceuticals, electrical goods, you name it. Tesco’s deputy chair, announcing record profits in 2003, complained: ‘It’s not good enough. We have got only 5 per cent of the non-food market. We have 18 per cent of the grocery market and there’s 90 per cent of the non-food market to go for.’3

Corporate organics

Providing supermarkets with organic produce is now big business, and the world’s agro-industrial behemoths are muscling in on a sector which once belonged to a fringe movement of small-scale farmers seeking out ways of producing food more sustainably.

What you are buying when you choose an organic product from a supermarket is probably not the crop of a local farmer. Despite being infamous for pollution, land rights abuses and genetically engineered crops, the corporations which already control much of the globe’s food supply, such as Cargill and Archer Daniels Midland, are increasingly buying up organic companies. Many organic brands marketed as if they are small, independent, benevolent firms are actually owned by transnationals. They include Seeds of Change, bought by Mars in 1997, Green & Black’s, snapped up by Cadbury Schweppes in 2005 and Back to Nature, held since 2003 by Kraft (a subsidiary of Altria, which owns tobacco giant Phillip Morris).

In Britain, supermarkets are quite unashamedly appropriating the methods used by small organic farmers to sell their produce. Tesco and Sainsbury’s both recently announced that they were starting ‘veg box’ delivery schemes, which have long been one of the most effective means of directly linking organic producers and consumers while cutting out the supermarket intermediaries.

Watering down standards

The concentration of leading organic brands in the hands of transnationals is steadily turning organics from a progressive movement into a label supermarkets can charge higher prices for. Sadly the hiked prices do not necessarily feed back into more ecological practices or better conditions for workers. Quite the opposite. According to Mike Green of the UK Soil Association: ‘Small and medium producers are being squeezed out because it becomes financially unviable for them to sell to supermarkets that are pushing down prices and cutting margins.’

Meanwhile corporate interference has been compounding the problems. In 2002, the US Department of Agriculture relaxed organic regulations, allowing supermarkets to increase the availability of produce labelled ‘organic’ without the expense of genuinely improving standards.4 Conscious consumers have been fighting a rearguard action ever since. The US Organic Consumers Association has launched a boycott of several supermarkets’ own-brand ‘organic’ milk because, it says, the companies are buying it from producers who keep cows under factory farming conditions.

In another attack on organic standards, in 2005 the EU announced plans, currently being fiercely opposed, to allow food labelled ‘organic’ to contain up to 0.9 per cent contamination with genetically modified materials. In Britain, Marshall’s, one of the largest suppliers of vegetables to supermarkets, is rapidly moving into large-scale organic provision as demand grows. The company has been fined over £30,000 for pollution incidents between 2004 and 2005.5

‘Permanent global summertime’

For many people, the term ‘organic’ evokes images of small producers, farming in tune with nature. But the standard range offered in supermarkets means chasing the seasons around the world, to give us a ‘permanent global summertime’ where anyone can buy summer fruit and vegetables in the depths of winter.

In Northern supermarkets this means importing fresh produce from countries like Argentina, Chile and South Africa, where costs and labour standards are lower, and regardless of the massive contribution these ‘food miles’ make to climate change.

The eternal availability of unseasonal food is also a concern raised by critics who see people increasingly disconnected from nature and lacking basic awareness of where their food comes from. A 2005 survey of 8-14 year olds by the British Heart Foundation found that 37 per cent did not know that cheese was made from milk, and 36 per cent weren’t aware that chips come from potatoes.

Unreformed characters

The negative impacts of supermarkets provide fodder for campaigns across the globe. Aggressive pricing which drives small local businesses into bankruptcy, encouragement of car culture, the environmental implications of building large superstores on out-of-town sites, squeezing small supplier firms, using wasteful packaging, and poor treatment of workers on the shop floor and in Majority World sweatshops are just some of the criticisms levelled against the big players.

Despite claims of reform, the evidence suggests that supermarket business continues very much as usual. A report by the National Labour Committee on Jordanian garment factories supplying Wal-Mart stores in 2005 and 2006 found horrific practices, including sexual and physical abuse of female workers.6 In April 2006, Hong Kong environmental groups staged protests at supermarket packaging waste and plastic bags clogging up the cramped environment of the island.

In August 2006 the BBC accused Tesco of ‘dragging out the planning process, challenging enforcement orders, manipulating the planning laws, and breaking them on occasion’ after the supermarket built massive out-of-town stores which exceeded planning permissions, and dumped 27,000 tonnes of rubble on an official Area of Outstanding Natural Beauty.7 The UK’s independent Competition Commission is currently conducting a wide-ranging investigation into the big supermarkets, taking into account planning, pricing and supplier relationships.

Supermarket PR departments are working hard on improving their image – and let’s hope we are seeing a genuine move to minimize some environmental impacts. But their interest in organics is far from altruistic. The ‘green dollar’ has become very lucrative, and the need to win back consumers’ approval is pressing.

The danger is that supermarkets, far from being reformed by their exposure to organics, are transforming an environmental movement striving to provide a sustainable alternative into a meaningless brand. Wal-Mart, which boasts in its 2006 annual report that its marketplace is ‘clearly the world,’ has its sights not only on aggressive global expansion, but also the meaningless commodification of sustainable values.

  1. Amanda Griscom Little, ‘Don’t Discount Him’, 12 April 2006, http://www.grist.org/news/maindish/2006/04/12/griscom-little
  2. Tesco, Sainsbury’s, Asda/Wal-Mart and Morrisons.
  3. Joanna Blythman, ‘Shopped: The Shocking Power of British Supermarkets’, 2004, p 305.
  4. Cornucopia Institute, ‘Maintaining the integrity of organic milk’, April 2006, http://www.cornucopia.org/index.php/dairy_brand_ratings
  5. ENDS Report 378, ‘Vegetable supplier fined’, July 2006.
  6. National Labor Committee, ‘US Jordan Free Trade Agreement Descends into Human Trafficking,’ May 2006, http://www.nlcnet.org
  7. BBC, ‘Tesco breaches planning laws’, 18 August 2006, http://news.bbc.co.uk/1/hi/uk/5261844.stm

Sarah Irving is a researcher and writer at Ethical Consumer magazine and a freelance writer specializing in issues of social and environmental justice.

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